What’s another $25 billion for Detroit automakers?
Filed under: Ford Motor (F), General Motors (GM), Toyota Motor Corp. ™, Mutual funds, Money and Finance Today, Nissan Motors (NSANY), Financial Crisis
Lost in this weekend’s news about the $700 billion bailout package for the banking industry was a $25 billion loan package for United States auto manufacturers. This package comes at a time when apparently Congress and the President believe that the American people will see $25 billion as a pittance compared to the $700 billion they’re already planning to spend on mortgages. While there certainly is precedence for this move — the government loaned $675 million to Chrysler in 1980— this loan package is several orders of magnitude larger.
Ryan Pfenninger of MarketRiders is outraged at this loan package, claiming it is anti-competitive to startup companies like Tesla Motors who are investing their own money in alternative technologies like battery power. $25 billion is a lot of money. Detroit should not be able to argue for 30 years against improved fuel mileage and better technology, and then come back to the same government they persuaded into facilitating their failure, for a bailout.
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